$3.8B JetBlue, Spirit Merger Grounded

JetBlue and Spirit Airlines agreed to end their $3.8 billion merger after encountering substantial regulatory and legal challenges.

JetBlue stated that while both companies continue to believe in the benefits of a merger, the decision “is the best path forward.” Both companies believed they were unlikely to achieve the required closing conditions before the July 24 deadline.

“After discussing our options with our advisors and JetBlue, we concluded that current regulatory obstacles will not permit us to close this transaction in a timely fashion under the merger agreement,” said Ted Christie, Spirit president and CEO.

JetBlue will pay Spirit $69 million as part of the agreement. While the merger agreement was in effect, Spirit stockholders received approximately $425 million in total prepayments.

JetBlue CEO Joanna Geraghty, who took over as CEO in February, argued the deal, announced in July 2022, “would have unleashed a national low-fare, high-value competitor to the Big Four airlines.”

“Even if the ruling was overturned on appeal, we simply don’t see a path to regulatory approval by the required July 24 deadline.”

In January, a federal judge halted JetBlue’s acquisition of Spirit on antitrust grounds, agreeing with the Department of Justice that the transaction would reduce the availability of low-cost airline tickets.